5 Ways to Improve Your Family Office in 2024

Let’s make 2024 a year of renewed focus and productivity for family offices. Whether it’s about refining purpose, enhancing reporting mechanisms, proactive tax planning, clarifying roles, or embracing simplification. In this post, we delve into “5 Improvements Your Family Office Can Make”. Offering insights and strategies that are not just about preserving wealth, but about enriching the legacy and impact of those we serve.

1. Codify Your Purpose

Wealthy investors understand that “making money” for its own sake leads to moral dead ends. This is because, once we’ve discovered how to consistently generate wealth & capital; it becomes clear that meaning and purpose are far more important. In fact, most enlightened investors make it their purpose to achieve non-monetary goals. From promoting environmental sustainability, to supporting social justice, to fostering entrepreneurship, and even using their financial resources to cure disease. Your unique personal values guide the way you use your wealth to make impact.

But, to leave a lasting financial legacy, wealthy investors need to define what their purpose is. And, they must codify this purpose so that others can help them achieve their goals.

If you don’t already have a purpose for your wealth, we can help you craft a family mission statement. This document can be used to make further plans to undertake your specific goals. Whether they’re philanthropic or for-profit. Contact Us to get started.

2. Upgrade Reporting

All family offices should be generating consistent periodic consolidated reports for their stakeholders. These reports should be tailored for each person using them. And, presented in a customized way that each individual can digest. From the most sophisticated financial professional to the newbie inheritor.

I’m surprised by how many family offices still present statements directly from brokers instead of generating customized consolidated reports themselves. So to overcome this, one of the main functions of our family office is generating consistent quarterly reporting for our clients and then presenting these reports in structured family meetings.

3. Tax Planning: Proactive, not Reactive

Most accountants serving wealthy investors would rather spend less time on compliance (i.e. tax returns) and more time providing value added advice. But, running an accounting practice is demanding and so most accountants get bogged down in their day-to-day work. They neglect annual reviews where value added advice and recommendations for improvement can be presented. That’s why our family office works closely with the accountants of our clients to ensure time is allocated to proactively making tax arrangements. Instead of simply reacting when life events occur.

4. Document Roles & Responsibilities

Many family offices have grown organically out of operating businesses. When the business is sold, the senior finance team often continues by running the newly formed family office. One of the problems with this structure is a CPA who may have been a good controller for an operating company doesn’t have any experience in wealth management. The family’s fortune is now in the hands of an in-experienced leader.

One solution to this problem is to clearly document everyone’s role at the family office. Do all family office employees including foundation staff have documented job descriptions?

5. Simplify

The best thing all wealthy investors can do is SIMPLIFY! There are many benefits of simplification including reduced costs, less bureaucracy, and more focused energy put towards the things that truly matter.

But too often, family office staff recommend complex structures and complicated investments policies. And at the same time, complexity obscures the truth, and makes it more difficult for investors to determine what’s really happening.

Ways We Support Simplification and Clarity:

• Provide consolidated reporting.
• Reduce the number of investment accounts and eliminate multiple investment managers with duplicate mandates.
• Reduce the number of foundation grantees and increase the size of those remaining.
• Ensure professional advisors (lawyers, accountants, and investment managers) justify their recommendations by aligning with the goals of their client.

Whether you’re looking to redefine the way your family office operates, seeking to enhance its effectiveness, or just curious about how these strategies can be tailored to your unique situation, we invite you to reach out to us. If you’re a wealthy investor, we’re ready to provide the insights and support you need to elevate your portfolio in 2024 and beyond. Contact us today to start a conversation that could mark the beginning of a transformed approach to your family’s wealth management.